Switch Language

UK: Will there be cross-party
agreement?

No
parliamentary majority for the negotiated Brexit deal means the likelihood of a
no-deal Brexit is increasing.

GD/AD –
01/2019

As
expected, Prime Minister Theresa May’s deal with the European Commission was
voted down in Whitehall. Many of her own party members and her ‘tolerated
partner’ from Northern Ireland’s protestant Democratic Unionist Party rejected
her deal, as did Jeremy Corbyn’s Labour opposition party. The Labour Party is
pushing for new elections and initiated a vote of no confidence as a result of
May’s defeat, which she comfortably survived.

The
culture of debate and party loyalties are quite different in the UK than we
know from the German Bundestag. So far, neither the sitting Labour parliamentary
faction nor its leader and Shadow Prime Minister Jeremy Corbyn, who himself is a
Eurosceptic, albeit because of reasons other than those of classic Brexiteers, have
presented a clear European policy concept, let alone a solution, for preventing
the so-called ‘horror scenario’ of a no-deal Brexit. Therefore, attempts now to
try and find consensus across factions may already be too late.

The
range of opinions includes calling for a new referendum. Currently, polls
suggest that such a referendum would result in a narrow win for the remain
campaign. The chances of this happening are slim and, in terms of timing, would
be impossible before the exit deadline of 29 March 2019. In addition, the
legitimacy of a new referendum is questionable, especially if, as expected, the
new win were to be as narrow as the last one.

The
fundamental flaw of having a referendum in 2016 on a complex issue, which is
extremely difficult for voters to fully comprehend, has since revealed a chain
of negative consequences with a lack of clarity for millions of people. This does
not apply so much to statutory insurance, but it definitely does to customers
of private financial and insurance products, whose validity in EU countries is
secured by various means such as ‘passporting’. This means that a financial
product approved in one EU country can then be sold on the market in other EU
countries.

According
to the Bank of England, around 30 million such contracts in the EU and around
six million in the UK would be void if they ran beyond 29 March 2019. Even if those
in the know were to move their policies via a Part VII transfer to another
jurisdiction, as suggested by Welt Online,
this would be too costly and time-consuming for most. As reported, every such
transfer would have to be confirmed in court. In the opinion of industry
insiders, this technical problem is unlikely to be fixed with quick policy
solutions in the usual style. Rather, it requires suitable solutions that are
unbureaucratic and pragmatic in nature, something which is rarely found in
London’s current fiery environment.

The
debate in Westminster has once again highlighted the strong emotions of the
situation. Accordingly, a no-deal Brexit is becoming more and more likely,
despite the countless negative consequences. According to reports from BBC Online, France is actively preparing
for this outcome, followed by other EU countries, including Germany. The
importance of preparing for a no-deal Brexit is growing.

The
spectrum of effected institutions and individuals is wide, including tourists looking
for medical treatment where the EU health card is accepted; posting regulations
for workers and their employers; market access issues; customs formalities; import
VAT (with or without input tax deduction?); foreign students in terms of their
UK university fees; and an almost countless number of everyday issues.

Critics
are of the opinion that Jeremy Corbyn’s position on European policy remains
unclear. If Labour had taken a clear stance for remaining in the EU prior to
the referendum, it is unlikely that the outcome would have been as it,
regrettably for many people, now is.